Given concerns in the market about inflation and tariffs, have analysts lowered EPS estimates more than normal for S&P 500 companies for the third quarter?
The answer is no. During the third quarter, analysts actually increased EPS estimates slightly for the quarter. The Q3 bottom-up EPS estimate (which is an aggregation of the median EPS estimates for Q3 for all the companies in the index) increased by 0.1% (to $67.41 from $67.32) from June 30 to September 30.
In a typical quarter, analysts usually reduce earnings estimates during the quarter. During the past five years (20 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 1.4%. During the past ten years, (40 quarters), the average decline in the bottom-up EPS estimate during quarter has been 3.2%. During the past fifteen years, (60 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 3.4%. During the past 20 years (80 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 4.3%.
The third quarter marks the first time that analysts have increased EPS estimates in aggregate during a quarter since Q4 2021 (+0.3%).
At the sector level, six of the eleven sectors witnessed an increase in their bottom-up EPS estimate for Q3 2025 from June 30 to September 30, led by the Energy (+4.2%) and Information Technology (+3.6%) sectors. On the other hand, five sectors recorded a decrease in their bottom-up EPS estimate for Q3 2025 during this period, led by the Health Care (-7.3%) sector.
Analysts also increased earnings estimates for 2025 during the past three months. From June 30 through September 30, the CY 2025 bottom-up EPS estimate increased by 1.3% (to $267.65 from $264.15).
At the sector level, six sectors witnessed an increase in their bottom-up EPS estimate for CY 2025 from June 30 to September 30, led by the Communication Services (+3.7%), Consumer Discretionary (+2.9%), and Financials (+2.6%) sectors. On the other hand, five sectors recorded a decrease in their bottom-up EPS estimate for CY 2025 during this period, led by the Health Care (-2.1%) sector.
Analysts also increased earnings estimates for 2026 during the past three months. From June 30 through September 30, the CY 2026 bottom-up EPS estimate increased by 1.2% (to $303.76 from $300.14).
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